Boeing chief sees progress in plane-subsidy dispute

PARIS (AP) — The prospect of a negotiated settlement to the trans-Atlantic trade dispute on plane subsidies has improved, Boeing Chairman and Chief Executive Jim McNerney said Wednesday.

"I'm beginning to see signs that the two governments are increasing the pace of their dialogue, and I'm supportive of that," McNerney told reporters in Paris of the dispute within the World Trade Organization over public aid to Boeing Co. and its European rival, Airbus.

Yves Galland, head of Boeing's French division, elaborated, saying a "certain number of contacts at government level" had boosted hopes for a settlement to the dispute — which threatens to be the most complex and costly that the WTO has ever adjudicated.

The standoff began in late 2004, when Washington tore up a 1992 EU-U.S. pact on aircraft subsidies and filed a formal WTO complaint against EU government aid to Airbus. Brussels retaliated in a countersuit citing tax breaks and military funding to Chicago-based Boeing and its suppliers — including Japanese companies working on the 787 Dreamliner, due to enter service in 2008.

Toulouse-based Airbus is 80 percent-owned by Franco-German defense contractor European Aeronautic Defence and Space Co. Britain's BAE Systems PLC owns the remaining 20 percent but is seeking to exercise a put option allowing it to sell the stake to EADS.